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25 May 2010

Protecting the NHS

There are few people who are valued more in our society than the hardworking doctors, nurses and other staff members in the NHS who strive constantly to care for us in times of ill health. People in Scotland have a special place in their heart for the NHS, so it is scarcely any wonder that claims of cutbacks and job losses are deeply alarming to people.

South of the border, the previous Labour government cut back spending on the NHS by more than £3 billion which inevitably had a knock on effect to the amount of money that Scotland receives under the Barnett formula. Yet, in contrast to that decision, the SNP Government committed to protecting the NHS and as a result it saw its budget in Scotland rise above inflation despite Scotland’s funding being cut.

In response to some of the irresponsible claims that other parties have put about, the Health Secretary has made a guarantee to NHS workers that there will be no compulsory redundancies. Times are certainly tight, and like all public services the NHS must seek to operate as efficiently as possible, but I know that this commitment will be enormously comforting to NHS staff and to members of the public.

With record funding levels and record low waiting times, the NHS in Scotland faces the challenges ahead from a position of strength and the SNP Government will continue to protect it during the difficult times ahead.

Scotland’s offshore potential

I have written before about the enormous economic potential that Scotland’s developing offshore renewables industry has for Banff & Buchan yet that potential was recently put into figures that would surely make anyone sit up and take notice. The Offshore Valuation Study which was published to coincide with the All Energy conference in Aberdeen found that the practical offshore resource in Scotland’s seas is a staggering 206 Gigawatts.

To put that figure into some kind of context, if just one third of that resource was successfully harnessed then the value in electricity sales would be an estimated £14 billion by 2050. Scotland has the advantage of having 25% of Europe’s offshore wind and tidal energy potential and 10% of Europe’s wave potential in the waters off our shores.

Across the UK it is estimated that up to 145,000 jobs could be created as a result of the emerging green industry and a significant number are likely to be in Peterhead, with the town having recently taken another step towards becoming a hub for the industry thanks to progress on Scottish Enterprise’s plans to develop an industrial park for the offshore renewables industry.

Yet to fully take advantage of the potential that exists, as the Offshore Valuation Study rightly points out, will require the development of a European super-grid. With such a grid, which has been identified by the European Union as a key infrastructure project, Scotland will gain access to a continental marketplace where we can sell the excess renewable energy we produce. The importance of developing that infrastructure to Scotland’s economy can scarcely be underestimated.

The SNP has long been calling for support for such a measure, and we will continue to do so, but as long as Scotland does not have its own voice in Europe, we need the new UK Government to live up to its responsibilities and take a leading role in pushing for the construction of such a super-grid. Its commitment to doing so will be an early test it can expect to face and for the sake of Scotland’s future it must not be found wanting.

11 May 2010

Scotland’s funding

With the sound and fury of the election now behind us, the next big issue on the horizon is the referendum bill which will shortly be introduced into the Scottish Parliament, proposing to give people in Scotland the choice of what our constitutional future should be. I, and my colleagues in the SNP, strongly believe that the full powers of independence are what Scotland needs if we are to grow our economy, fundamentally address some of the social problems prevalent across the country and stand up for Scottish interests in Europe and the wider world.

As a firm believer in democracy it is of course right that the people of Scotland should be given the right to decide for themselves what future they want. However, the London parties have signalled their intention to conspire to block such a referendum taking place. As well as being fundamentally undemocratic, this raises serious questions about what alternative Scotland is likely to see.

Scotland’s tax revenues currently travel south to the Treasury before a certain amount, determined by the Barnett Formula, is returned to the Scottish Government to spend on devolved matters as it sees fit. This amount rises and falls based on spending decisions in England on those services that are devolved to Scotland north of the border. While I would certainly not describe this situation as satisfactory, especially as projects are often classified as being of “national” importance in order to avoid Scotland receiving its share of spending that takes place south of the border, it does at least have the virtue of stability.

In the Calman Report, the union parties’ alternative to the National Conversation that the Scottish Government held, a proposed replacement to the Barnett formula was made that would see up to 10p of income tax and certain other taxes devolved to Scottish control with a reduction in the Barnett Formula’s block grant to compensate for this. However, while this may seem at first glance like a sensible way of making the Scottish Government more accountable for its spending, in reality it is the worst of all words and would be a disaster for Scotland.

Any fluctuation in income tax revenues would have to be met with immediate cuts in Scotland in advance of the final revenues being known. That would send Scotland into a vicious cycle of having to make cuts or raise taxes which would in turn lead to a further fall in income tax receipts and necessitate another round of cuts or tax increases. Scarcely any wonder that the proposals have been described by some members of the expert panel that drew them up as “seriously flawed, if not illiterate”!

The only sensible alternative to the Barnett Formula that has been proposed is for the introduction of fiscal autonomy, whereby Scotland keeps control of all tax revenues generated north of the border and, as long as Scotland remains in the Union, the Scottish Government pays a certain amount to the UK Treasury for shared services such as the armed forces. This is manifestly a far fairer solution. It would give the Scottish Government the control over the financial levers it needs in order to drive Scotland’s economic recovery and to build for the future.

Economists and leading business people have reached the conclusion that this is the best option when any consideration of a replacement to the Barnett Formula is being made. If our proposed referendum on independence is blocked by the other parties, then fiscal autonomy is the only acceptable alternative to the Barnett Formula for Scotland.

Stewart Stevenson
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